Hornby on a rough road

TOY maker Hornby today reported a 32 per cent fall in annual pre-tax profits as a weak pound and continuing disruption to supplies of its model railways from China offset robust sales growth. The company said that demand for its toys, including brands such as Airfix, Scalextric and Corgi, continued to grow but that it had decided to scrap its final dividend to bolster its balance sheet.

TOY maker Hornby today reported a 32 per cent fall in annual pre-tax profits as a weak pound and continuing disruption to supplies of its model railways from China offset robust sales growth.

The company said that demand for its toys, including brands such as Airfix, Scalextric and Corgi, continued to grow but that it had decided to scrap its final dividend to bolster its balance sheet.

Hornby posted a pretax profit of £6.1m for the 12 months to March 31, down from £9m in the same period last year despite a rise in revenue to £61.6m pounds from £55.7m.

Chief executive Frank Martin said: "This has been a challenging year for Hornby. As a result of the weak pound and continuing supply chain issues, our profits and margins have come under pressure."

Rising sales showed Hornby's resilience to recession thanks to its focus on hobby-related toys but problems with its supplier in China remained a source of frustration, said Mr Martin.

Hornby said it had recently signed an exclusive licence agreement with the Brawn GP Formula One team, agreed a deal with Disney Productions relating to the animated movie series, Cars, and extended a James Bond 007 licence to include its Corgi toy cars.

Shares in Hornby have plunged over 40 per cent over the last 12 months.